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2016 (4) TMI 304 - AT - Income TaxDisallowance of prior period expenses - crystallization of expenses in the present year - Held that:- As the liability to pay the expenditure crystallized during the assessment year in question. Similarly, in assessment year 2004-05 the payment to employees was made based upon the performance of the employees in the earlier year. The liability crystallized during the assessment year in question, because the working of the incentives based on performance was cleared for payment in the month of July, 2003 which falls during the assessment year under appeal i.e. assessment year 2004-05. Since the liability to pay the expenditure crystallized during the assessment year under appeal, therefore, the learned CIT(A) was justified in deleting the addition. The learned DR has not produced any material contrary to the findings of the learned CIT(A). Thus, the Revenue has failed to rebut the findings of the learned CIT(A). We, therefore, do not find any infirmity in the order of the learned CIT(A) in deleting the disallowance of the expenditure. - Decided in favour of assessee Disallowance u/s 14A - Held that:- Looking to the huge base of capital and free reserve and surplus vis-à-vis minor investment it can be easily inferred that most probably non-interest bearing funds have been invested in the Investments. Accordingly, we delete the addition made u/s 14A Decided in favour of assessee
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